S&P 500 closes lower Friday, but logs its second weekly gain

The major averages were mixed to end the week.

The S&P 500 slipped 0.29%, closing at 6,449.80, while the Nasdaq Composite shed 0.40% and finished at 21,622.98. On the other hand, the Dow Jones Industrial Average added 34.86 points, or 0.08%, and settled at 44,946.12.

— Lisa Kailai Han

Despite expectations for lower rates in the next year, Barclays remains bullish on the financials sector, it wrote in a Friday note.

“Regarding concerns around owning Financials into lower rates: the history of Fed cutting cycles since 1990 suggests falling rates are not a headwind for the sector unless the central bank is cutting into a recession. Earnings and valuations are supportive; we remain Positive on the sector,” wrote strategist Venu Krishna.

The strategist added that tailwinds such as potential deregulation and M&A activity are still in the pipeline.

— Lisa Kailai Han

Warren Buffett’s Berkshire Hathaway, the largest institutional shareholder of Bank of America, sold another 26.3 million shares in the second quarter, bringing its ownership down to 8.1%.

Piper Sandler pointed out that the bank has been buying back significantly more shares that Berkshire is dumping, so the impact on the stock should be minimal.

“By now, the market is hopefully attuned to the regular sales,” Piper Sandler said. “BAC’s solid capital position means that it has the wherewithal to buy back every Q significantly more stock than Berkshire is selling… Thus, the practical impact of Berkshire’s sales should be negligible.”

— Yun Li

Solar stocks surged after the Treasury Department issued guidance on how renewable projects can qualify for tax credits under President Donald Trump’s One Big Beautiful Bill Act.

Shares of the big renewable developers NextEra and AES Corp. popped 5% and 4%, respectively, while the Invesco Solar ETF jumped 10%. The rooftop solar installer SunRun soared about 40%.

The One Big Beautiful Bill Act terminates the investment and production tax credits for solar and wind projects after 2027. But projects that start construction within 12 months of the legislation passing Congress can claim the credits beyond 2027.

The solar industry was waiting for guidance on how the Treasury Department would define when construction on a project begins. Treasury said projects that begin construction before July 4, 2026 must show significant physical work to qualify for the credits.

Roth analyst Philip Shen said overall the Treasury guidance makes minimal changes and is better than expected.

“All in, this is much better than expected and good for nearly all the stocks in our coverage universe,” Shen said.

— Spencer Kimball

Investors should take on more risk with the cash they have sitting around, according to UBS.

In a Friday note to clients, Ulrike Hoffmann-Burchardi, chief investment officer of Americas and global head of equities at UBS, pointed out that the market is likely to see some inflationary pressures decrease with a likely rate cut in the September Fed meeting.

“We expect overall inflation to continue on a gradual upward trend as businesses pass along their higher costs, but we also believe slowing shelter inflation and pushback from increasingly stretched consumers should help offset some of the tariff impact on price pressures,” Hoffmann-Burchardi wrote. “We continue to believe that the Fed will resume easing in about a month’s time, Treasury yields should trend lower for the remainder of the year, and investors should put excess cash to work as inflation erodes portfolio returns from cash holdings.”

Cash has historically underperformed stocks in all 10- and 20-year holding periods, the CIO noted.

— Pia Singh

AMAT 5D chart

Shares of the semiconductor equipment company were trading 13% lower after it provided lighter-than-expected earnings and revenue outlooks for its current quarter. However, Applied Materials posted a fiscal third-quarter earnings and revenue beat.

Arya’s new forecast implies a downside of 4% from Applied Materials’ Thursday closing price.

“While AMAT is a high quality supplier, the company’s higher exposure to (over-supplied) mature node (aka ICAPS, esp. in China) and certain leading-edge customers (INTC) is impacting them more this part of the cycle,” the analyst wrote. “Per AMAT the uncertainty could persist, making it tougher for the stock to outperform despite reasonable valuation. We suspect the slowdown is more company specific, and we don’t see the same read-across to our top pick LRCX or to KLAC.”

— Lisa Kailai Han

Stocks are still teetering near their all-time highs, and Deutsche Bank believes that this market strength could continue.

On Wednesday, both the S&P 500 and Nasdaq Composite climbed to new record closes following Tuesday’s cooler-than-expected consumer price index release.

“The main catalyst was mounting speculation about a Fed rate cut as soon as the next meeting in September, with the hope being that a series of cuts would help to maintain the economic expansion and support risk assets. Indeed, it’s worth noting that when the Fed have historically cut rates into a soft landing (rather than cutting because of a recession), that’s usually been a very strong backdrop for markets, and so far at least, that pattern has been playing out again,” the bank wrote in a Thursday note to clients.

— Lisa Kailai Han

CMG 5D chart

Shares of Chipotle have slipped 15% since reporting earnings on July 23. The burrito chain slashed its same-store sales outlook for 2025 for the second quarter in a row.

But on Monday, Piper Sandler upgraded the stock to an overweight rating from neutral.

“While the debate that investors are having is definitely around the idea of whether or not CMG is still a consistent [plus mid-single-digits percentage] [same-store sales] business, we think the market itself has already priced in an outcome where it doesn’t get there next year,” wrote analyst Brian Mullan.

“Tactically, we do see and respect the risk to the top-line in the back half of this year; and in fact, our in-print estimates are already below consensus,” Mullan continued. “While this is not a good thing per se, and there is a magnitude of misses that would render us more concerned; at present we think a lot of the bad has already been priced in with shares down ~31% YTD.”

— Tom Rotunno, Lisa Kailai Han

A sharp rise in UnitedHealth stock in recent days following Warren Buffett’s Berkshire Hathaway taking a new position in the company could be overdone, according to RitholtzWealth Management co-founder and CEO Josh Brown.

A lot of people who were excited about UNH today were equally excited at $600 [per share], $550 [and] $500, 450…I think what we saw Berkshire do was important insofar as it probably puts an end to the credibility problem here, but the part [where] I disagree [is] with all the excitement around the name,” Brown told CNBC’s Halftime Report” on Friday.

“It’s $1.6 billion dollars of a Berkshire Hathaway equity portfolio that’s $300 billion, [so] it’s not even half of one percent,” He added. “If you tell me a quarter from now, ‘hey look the stock started rallying and BRK kept buying, maybe I’m a little bit more interested. But this is a rounding error for Berkshire relative to the rest of its stocks, and relative to Berkshire’s overall market cap.”

UnitedHealth stock surged nearly 14% on Friday, and notched its largest gain since September 2008. Buffett revealed a stake of 5 million shares in the company that was amassed last quarter, or about $1.6 billion.

— Brian Evans

CAVA 5D chart

These are the stocks moving the most in midday trading:

UnitedHealth— The health insurer rallied 13% after Warren Buffett’s Berkshire Hathaway revealed a stake of five million shares, worth about $1.6 billion.

Applied Materials— The semiconductor equipment manufacturer plunged 13% after the company’s current-quarter outlook trailed estimates from analysts polled by LSEG.

Sandisk— The data storage provider lost nearly 11% after Sandisk said fourth-quarter non-GAAP gross margin dropped to 26.4% from 36.4% a year ago.

Read the full list of stocks moving here.

— Scott Schnipper, Lisa Kailai Han

IHF 5D chart

UnitedHealth, last up 14%, led the index’s rally upward.

— Gina Francolla, Lisa Kailai Han

The U.S. Global Jets ETF (JETS) is up around 8% week to date, which would mark the ETF’s best week since November 2023, when it rose 8.13%.

Contributing to the move higher was Spirit Airlines warning in a quarterly report on Tuesday that it could shut down very soon, which would reduce capacity for the airline industry and therefore raise prices. Another tailwind came from Tuesday’s consumer price index, which signaled improving pricing power for airlines.

— Tom Rotunno, Lisa Kailai Han

TAN 5D chart

Week to date, the ETF has risen 4.3%. That puts it on pace for its best week since July 3, when it gained 13.44%.

— Gina Francolla, Lisa Kailai Han

On Friday, eight stocks in the S&P 500 traded at new 52-week highs:

• Fox Corporation Class Atrading at all-time highsback to its creation as the portion not acquired by Disney in 2019
• Match Group trading at levels not seen since January 2024
• Hasbro trading at levels not seen since September 2022
• Goldman Sachs trading at all-time high levels back to its IPO in May 1999
• Loewstrading at all-time highs back through our history to 1972
• Incyte Corp trading at levels not seen since June 2021
• Johnson & Johnson trading at levels not seen since January 2023
• C.H. Robinson Worldwide trading at all-time high levels back to its IPO in October 1997

— Christopher Hayes, Lisa Kailai Han

S&P, DIJA 1D chart

The Dow’s new high surpassed its prior record from Dec. 4, 2024. If the S&P closes higher on Friday, it would notch its 19th record close of the year.

— Nick Wells, Lisa Kailai Han

Consumer sentiment deteriorated in the first half of August as inflation concerns increased, the University of Michigan reported Friday.

The school’s closely watched survey of consumers posted a reading of 58.6, down 5% from July for the first decrease in four months and below the Dow Jones consensus outlook for 62.5. The current conditions measure tumbled 10.4%, though the expectations number was off just 0.9%.

On inflation, views at both the one- and five-year horizons rose half a percentage point, respectively to 4.9% and 3.9%.

“Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,” survey director Joanne Hsu said in a statement. “However, consumers continue to expect both inflation and unemployment to deteriorate in the future.”

— Jeff Cox

Check out the companies making headlines before the bell.

• Target— The retailer fell almost 2% after Bank of Americadowngraded Target to underperform from neutraland trimmed its price target on the stock. Target’s long-term outlook is deteriorating as the company falls further behind its peers, the bank said.Ulta Beautyand Target also agreed toend their partnership.
• UnitedHealth— The health insurer rallied 11% premarket. The advance came after Warren Buffett’s Berkshire Hathaway revealed a stake of five million shares, worth about $1.6 billion. The “Big Short” investor Michael Burry and Appaloosa Management’s David Tepper also disclosed sizable stakes in the company. If the UNH gains hold through the end of the session, it will mark the stock’s best day in five years.
• Applied Materials— The semiconductor equipment manufacturer plunged roughly 14% after the company’s current-quarter outlook trailed estimates from analysts polled by LSEG. Applied Materials’ fiscal third-quarter earnings and revenue topped Wall Street expectations.

For the full list, read here.

— Pia Singh

Consumers kept spending in July despite worries that potentially higher prices from tariffs might hold down demand.

Retail sales increased 0.5% for the month, according to Commerce Department data that is adjusted for seasonal factors but not inflation. Excluding auto-related items, sales rose 0.3%. Both were exactly in line with Dow Jones estimates.

Motor vehicle and parts sales jumped 1.6% on the month while furniture and home furnishings receipts grew 1.4%. Miscellaneous retailers saw a drop of 1.7% while building materials and home and garden centers fell 1%.

On a year-over-year basis, sales increased 3.9%.

In other economic news, import prices increased 0.4%, pushed higher by energy prices, while export prices were up 0.1%. The consensus forecast was for import prices to be flat.

Also, the Empire State Manufacturing Index posted a reading of 11.9, much higher than the 1.8 estimate. New orders posted a strong gain while prices edged lower as did the employment index.

— Jeff Cox

UNH 5D chart

UnitedHealth is set to add about 209 points to the Dow at Friday’s open. The Dow is price-weighted rather than market capitalization-weighted, so a stock’s impact comes from its share price rather than its market value.

Shares of UnitedHealth have climbed nearly 55 points this week and have contributed more than 330 points to the Dow, giving the index its largest week-to-date boost to the upside, all else equal.

— Nick Wells Lisa Kailai Han

If history is any indication, the dollar could wane from here, Bank of America wrote in a Thursday note.

“If Fed cuts were to occur in 2025, they would likely take place amid a backdrop of rising year-over-year (YoY) inflation. This is a possible but historically rare regime. The last time it has happened was from H2 ’07 to H1 ’08,” the bank said. “Fed rate cuts amid rising YoY inflation suppresses real policy rate for the U.S. and leads to a weaker USD, in-line with the 2007 historical analog.”

Bank of America continued: “Under this regime, the USD depreciation had been sharper prior to the Fed cut, and the USD bearishness would linger in the subsequent 3 months after the rate cut.”

— Lisa Kailai Han

We’re coming up to 20 minutes of trading, and European bourses are broadly higher.

The pan-European Stoxx 600 was last seen up 0.3%, with all major bourses in positive territory.

Circle Internet Group said Thursday that it priced its 10 million share offering at $130 per share. The stablecoin issuer announced the offering on Tuesday after it reported its first quarterly earnings as a publicly traded company.

Circle said it is selling 2 million shares, while the remaining 8 million shares will be sold by stockholders.

The offering has put pressure on the stock, which has fallen more than 12% so far this week. But the company’s gains have been robust since its June 5 initial public offering. Even with this latest pull back, shares are up almost 350% since the stock’s debut.

—Christina Cheddar Berk

These are some of the stocks making notable moves in extended trading:

• Applied Materials— The semiconductor equipment manufacturer tumbled 11% after the current-quarter outlook missed expectations of analysts polled by LSEG. Fiscal third-quarter earnings and revenue topped estimates.
• UnitedHealth— The insurer jumped nearly 8% after Warren Buffett’sBerkshire Hathawayand Michael Burry’s Scion Asset Management revealed stakes.
• Intel— The chipmaker climbed nearly 4% postmarket, adding to a 7%gain during Thursday’s regular session. Inteljumped afterBloomberg reportedthat the Trump administration is in talks to buy a stake in the company, which would help it to bolster its manufacturing capacity in the U.S.

Click here for the full list.

— Alex Harring

S&P 500 futures were little changed shortly after 6 p.m. ET. Dow futures rose 0.3%, while Nasdaq 100 futures ticked down 0.2%.

— Alex Harring